California gas prices on verge of shattering records

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Gasoline prices higher than $5 per gallon are posted at a Menlo Park, Calif., Chevron station on Friday, Oct. 5, 2012. In California, gasoline prices jumped overnight by as much as 20 cents a gallon ending a week of soaring costs that saw some stations close and others charge record prices. (AP Photo/Noah Berger)

Stunned, reeling and outraged. That was the mood of California drivers as gas prices approached record levels after double-digit increases Thursday and again Friday.

“I don’t even want to look at the prices anymore as I drive by gas stations,” said Melinda Vargas, of San Leandro. “But then I can’t help myself and take a peek.”

Then she really gets depressed. A Shell station off Interstate 880 listed gas for $4.69 a gallon, more than 50 cents higher than a week earlier.

The state’s record average of $4.61 could be shattered any day. With refinery problems reducing inventories to their lowest level in 10 years, prices Friday were just a few pennies short of records in most Bay Area cities.

The all-time single-day statewide high was reached in 2008, and “we most likely will exceed those highs,” said Cynthia Harris of AAA. “By how much we don’t know.”

While prices may rise, there may be an end to the pain in sight, as prices for immediate delivery of gas fell Friday.

“It may take a few days for stations to start lowering their prices because they aren’t yet buying the cheaper gasoline,” said analyst Patrick DeHaan of gasbuddy.com, predicting that some stations may lower pump costs by as much as 35 cents.

“Hang in there, Californians,” he said. “Relief is coming by mid-next week. But for now, virtually the entire state has already, or is about to, set all-time record high prices, not to mention the fastest gas price increase we’ve ever seen.”

Bloomberg News reported that wholesale gas has surged 70 cents this week, to $1.15 a gallon. That’s the highest level since at least November 2007. Retail prices jumped 35 cents.

“The price should be around $5.20 a gallon,” said Chris Mennis, an energy trader in Aptos. “But that would create a political firestorm and I think you’ll see new records, but not over $5.”

Gas was selling for $4.60 a gallon Friday in San Francisco, just two pennies shy of that city’s record. San Jose stood at $4.54, five cents short of its all-time high, while Oakland was at $4.52, six cents below its record.

The average price of regular gas across the state was nearly $4.49 a gallon, the highest in the nation, according to AAA’s Daily Fuel Gauge Report.

California even topped Hawaii, which usually has the nation’s most expensive gas. The average price in the Aloha State was about 8 cents a gallon less than in California.

The gas inventory shortage is compounded by the state’s strict pollution limits, which require a special blend of cleaner-burning gas during summer months.

The California Air Resources Board was reviewing a waiver filed by the California Independent Oil Marketers Association, which represents independent station operators, requesting that they be allowed to begin selling the winter blend of gas before the Oct. 31 switch.

David Clegern, a spokesman for the air board, told The Associated Press there is no timeline for a decision. The California Energy Commission must review gas inventory to determine if there is really a shortage and assess what effect the switch would have on air quality, he said.

And even if a waiver was granted, it may take weeks to ship extra fuel here. By that time, current refinery shortages should be over and prices should be going down.

In the meantime, it hurts to fill up. Rotten Robbie stations were selling regular gas for $4.59 a gallon, which matches its highest price from 2008.

The rapid rise led to lines of 50 cars at the Costco store on Automation Parkway in San Jose, filling up their tanks at $4.29 per gallon. When Costco opened its pumps Friday at 6 a.m., the price was $4.09. The store quickly raised the prices 20 cents.

By 9:15 a.m., people were spending nearly 20 minutes in line to fill up their tanks.

But down the road, a Chevron on Coleman Avenue was advertising a price of $4.58 for credit/debit card users. Only two or three cars were at that station.

Gary Richards has covered traffic and transportation in the Bay Area as Mr. Roadshow since 1992. Prior to that he was an assistant sports editor at the paper from 1984-1987. He started his journalism career as a sports editor in Iowa in 1975.